Tinci Holdings Limited is the kind of company that any aspiring developing nation with lots of polluting heavy industry should be happy to see thrive. Tinci specializes in "in developing, manufacturing and installing flue gas desulphurization systems for reducing sulphur dioxide emissions from coal-fired power stations and large industrial boilers in China."

You can think of the company as a front-line warrior against acid rain. In a country with as many coal-fired power stations as China, you'd also think business would be good. And so it was, as recently as September, when Tinci reported its interim results from the first half of 2008. Profits were healthy, and the future looked bright.

Favorable market conditions are expected in the longer term in light of the Chinese Government's well publicized decisions to take stronger measures to protect the environment; sales to small-to-medium sized power plants should be particularly buoyant.

Indeed, at the end of September, China's premier, Wen Jiabao, told Bruce Alberts, the editor-in-chief of Science Magazine, that "we have established a goal that our GDP growth every year must be accompanied by a four percent decrease in energy consumption and a two percent reduction in COD (chemical oxygen demand) and sulfur dioxide emissions every year."

Cha-ching!

And then the global economy ran right off the tracks.

Globalisation and the Environment informs us that on Oct. 29, Tinci, which is traded on the London Stock Exchange, released a trading statement declaring that its market circumstances had suddenly changed.

Following the Company's return to profitability in the first six months to 30 June 2008, trading conditions have deteriorated considerably. Despite the general recognition that China needs to reduce the pollution produced by its power stations, a number of desulphurization projects have been postponed or withdrawn due to power stations deferring capital expenditure. As a result, the number of projects available for Tinci to bid has reduced considerably.

There are two lessons to take from this development. First, as Globalisation and the Environment observes, there are trade-offs between environmental protection and short-term profit considerations -- "emissions will not be reduced as quickly as they should be due to economic conditions."

Second, perhaps the Chinese government is not putting quite as much teeth into its emissions reduction directives as Premier Wen claimed.